Assignment
1. Kay's beauty supply uses the gross profit method to estimate the cost ending inventory for in house interim financial statements. based on the following information for March, calculate kay's ending inventory at March 31.
cost of goods available for sale $125,000
net sales for March $80,000
estimated historical gross profit rate on net sales 35%
2. on september 28, 2013, a fire destroyed the entire merchandise inventory of carroll corporation.
sales, january 1-september 28, 2013 $540,000
inventory, january 1, 2013 $150,000
merchandise purchases, january 1-september 28, 2013 $465,000
(also $60,000 of goods in transit on september 28, 2013,
shipping FOB shipping point)
markup percentage on cost 20%
3) On May 1, 2013, ramden company issues thirteen percent serial bond with a face value of two million. the bond contract calls for retirement of the bonds in periodic installments of $200,000, starting on may 1, 2014, and continuing on each may 1 thereafter until all bonds are retired. How would the preceding information appear in ramden's balance sheets on december 31, 2013 and 2014?
4) August, Hill sales company had these summary transactions: 1. cash sales of $210,000 subject to sales tax of 6 percent 2. sales on account of $260,000, subject to sales taxes of 6 percent. 3. paid the sales taxes to the state. prepare journal entries to record this.
5) atwood table company has eight million of short-term notes payable owed to city national bank on december 31, 2013. then february 1, 2014 atwood negotiates a revolving credit agreement providing for unrestricted borrowings priced $6 million on february 1, 2014. borrowings will bear interest at one percent over the pre-vailing prime rate, will have stated maturities of 120 days, and will be continuously renewable for 120 day periods for four years. atwood plans to refinance as much as possible of the notes outstanding with the proceeds available from this agreement. Year end financial statements for december 31, 2013 are issued on march 30, 2014. prepare a partial december balance sheet for atwood showing how the eight million short-term debt should be reported. what is the justification for allowing short-term debt that is expected to be refinanced to be classified as a long-term liability.